Boston, MA 04/24/2014 (wallstreetpr) – Semiconductor giant, NXP Semiconductors NV (NASDAQ:NXPI), has announced it has been issued with a business license for its joint venture by the Chinese Government. This essentially means it will now open its doors and be the first true automotive semiconductor business in the country.
NXP Semiconductors to Focus on Research and Development
NXP Semiconductors NV (NASDAQ:NXPI) will be headquartered in Nantong China as it focuses in research development and sale of advanced application ICs in high performance mixed signal technology. The company will now focus on developing semiconductor solutions while also supporting demand for new automotive energy technologies for electric hybrid cars in the country.
With the issuance of the License, NXP Semiconductors now expects to benefit a great deal from an annual compound growth rate of 70% in the total number of electric cars. The Chinese government has already confirmed it is extending its subsidies for Electric vehicles from 25 cities to 80 cities while also investing extensively on infrastructure for charging the vehicles.
This essentially marks the best time for NXP Semiconductors to kick starts its operations in China sure to benefit from increased opportunities in the diverse market. The government investment is expected to drive customer’s appetite for electric vehicles.
Impressive Q1 Earnings
Entry into the Chinese markets comes at the back of NXP Semiconductors seeing its product revenue for the first quarter increase by 14% to a high of 1.207 million. Total revenue for the quarter came in at $1,246 million a growth of 15%. The company’s HPMS segment performed better than expected growing by 18% on a year over year but dropped by 5% sequentially.
NXP Semiconductor’s automotive business also continues to make impressive strides in the market growing by 20% in the process as demand for in vehicle networking solutions continues to surge. Improved demand for infrastructure and mobile payment products resulted in the company’s identification business registering a 6% year on year growth.
Industrial & Infrastructure business performed below expectations for the quarter despite registering a 19% growth on year over year basis with products segment offsetting the situation performing better than earlier anticipated. NXP Semiconductors NV (NASDAQ:NXPI) generated a total of $223 million in free cash during the quarter.